The Purdue Board of Trustees has approved performance metrics for determining a portion of the president's salary.
Under the plan, board members will evaluate Mitch Daniels on student affordability, graduation rates, fundraising, student success and university excellence. Those categories are weighted, with fundraising being the biggest determinant at 30%, affordability and graduation rates are 25% each, while the remaining two criteria are 10% each.
Mike Berghoff is chairman of the board’s compensation committee. He says the metrics will determine how much Daniels will receive of his $126,000 "at-risk" salary.
“There’s an affordability index that’s a published index you can refer to, and we’ll look at that to see how we’re doing compared to others before the board determines how much of his at-risk pay gets awarded.”
Berghoff says the outcome will be transparent and the board will show how much Daniels earned in each of the five categories over the past year, which runs from July to June.
“This is something [Daniels] brought to us,” Trustee Don Thompson says. “It’s something more like a corporate CEO compensation model.”
Daniels is guaranteed $420,000, which trustees point out is less than previous Purdue President France Cordova earned in her last year.
Berghoff thinks performance pay will become more common at the university.
“I think it’s a good behavior to model,” he says. “It’s not for the vast majority of the positions here, but I’m sure [Daniels] will find some that make great sense, and some people will be excited to do it.”